Will the Market Economy Win in Cuba?

      During Pope Benedict XVI’s visit, the pontiff called on the governments of both Cuban and U.S. to embrace change and move toward reconciliation. In his homily, the pope said, “Cuba and the world need change, but this will occur only if each one is in a position to seek the truth and chooses the way of love, sowing reconciliation and fraternity.” Cuban Vice President Marino Murillo, who is in charge of economic reforms, sharply rejected the pope’s plea for political openness and tolerance, saying simply, “In Cuba there won’t be political reform.” The pope’s March visit marks the second time a pope has visited Cuba. Previously, Pope John Paul II visited in 1998. Catholics are a small minority in Cuba, a country that for years repressed religious freedoms while championing Marxism. In recent years, however, the Cuban government has increased the freedoms granted to the Roman Catholic Church in Cuba. From 1959 until 1992, Cuba was officially a communist state outlawing religion. A constitutional change in 1992 allowed for the separation of church and state, lifting a ban that had previously prohibited Communist party members from expressing religious faith. While the Roman Catholic Church is the largest organized religion, evangelical protestant faiths along with a blend of traditional Afro-Caribbean beliefs and Catholicism is popular. For decades, Cuba adhered to strict socialist principles in the organization of its economy and businesses. All means of mass production are owned and controlled by the government, with nearly 83 percent of the labor force employed directly by the state and an additional 5 percent employed on state-controlled cooperatives. However, recent changes by the Cuban government are opening up new opportunities for small businesses, entrepreneurship and foreign investment. In November 2011, Cuba announced that it was opening up its state-run bank to small business loans. This development is part of Castro’s slow phasing in of a market economy. In response to cutbacks in government payrolls and a decrease in subsidies, Cubans are now being told to become “self-employed”. The small business loans are also aimed at encouraging the development of agricultural programs to help lessen the country’s dependence on $2 billion in agricultural imports.      

Outside Investment

  The impact of these reforms remains to be seen. The goal is to attract outside investment from Hispanic business and Hispanic leaders, many of whom have familial ties to Cuba. Hispanic news continues to debate whether outside investment will spur economic growth and lead to increased political reforms, or if outside support will only perpetuate 50 years of political repression. Cuba’s change may be imminent but the country will need to set its house in order (via internal investment/entrepreneurship training) before its doors open to the world.